Category Archives: Cases

Effect of cognitive biases on decision making and crisis management

05 Saturday Dec 2015

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One of the basic integral elements of crisis is surprise. It is that undefined factor that determines the development of an issue into a severe crisis. The prediction of a forthcoming destruction is easy as long as we accept that eventually there will be an internally or externally driven incident that will or will not have an impact on an organization. This deterministic approach should be challenged. Eventually we’ll all die one day but that doesn’t mean we will stop believing to the value of life.

So, how could we challenge the reality of an underlying undetermined factor? Someone might say we plan carefully and get ready for any eventuality. This is one of the basics in crisis management but we all know that organizations have failed to deal with incidents despite their well-prepared plans. One of the reasons for such failure is the incapability to identify warning signals of an imminent crisis. Most of the times we identify these signals after the crisis has occurred along the lines of a lessons learned process and then we ask ourselves «why didn’t we manage to see these signals before the incident?».

People tend to think in certain ways that can lead to systematic deviations from a standard of rationality or good judgment. Put simply, people miss the whole picture of an issue because they do not take into account alternative explanations for the evidence they see. These are the cognitive biases which affect belief formation, business and economic decisions, and human behavior in general.

To give you example, one of the cognitive biases that applies in the finance market is the ostrich effect. In behavioral economics, the ostrich effect is the avoidance of apparently risky financial situations by pretending they do not exist and we will refer to the Madoff scandal to show how the biases affect the decision making process.

The Madoff case is a good example that proves the ostrich effect. Harry Markopolos, an  American former securities industry executive, discovered evidence suggesting that Bernard Madoff’s wealth management business was actually a massive Ponzi scheme. In 2000, 2001, and 2005, Markopolos alerted the U.S. Securities and Exchange Commission (SEC) of the fraud, supplying supporting documents, but each time, the SEC ignored him or only gave his evidence a cursory investigation. Madoff was finally uncovered as a fraud in December 2008.

Markopolos proved using math that Madoff could not really produce 1% to 2% returns every month, in positive territory 96% of the time, producing a 45-degree curve of profit – with no volatility.

Even if the SEC executives did not listen to Markopolos, I wonder how really smart people in the finance sector failed to see Madoff’s Ponzi scheme. The warning signals were all around them but they couldn’t accept that one of the most respectable establishments in Wall Street could be a fraud.  Markopolos’s book on the Madoff Ponzi scheme titled ‘No One Would Listen: A True Financial Thriller’ is a great read and I totally recommend it.

The cognitive biases are an integral part of human behavior and as such they affect decision making in crisis management however it’s up to us whether these biases will play a bigger or smaller role in initially identifying the risks and then dealing with the issues or crisis.

The opinions expressed in this article are those of the author, and they do not reflect in any way those of his various affiliations.

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Do you really believe you can predict all crises?

15 Thursday Oct 2015

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A few days ago I read an interview of a well-known expert on crisis communications, who said that «All crises are predictable. If they are predictable, then they can be planned for» and I am afraid I have to disagree. To be honest, I tend to agree with the great Danish physicist and Nobel laureate,  Niels Bohr, who said “Prediction is very difficult, especially if it’s about the future”.

The role of all the crisis management professionals and communications experts includes the horizon scanning identifying potential threats and issues which should be analyzed and then integrated into a crisis management plan. A thorough horizon scanning will definitely bring on the surface issues that might harm the reputation and endanger the business continuity of an organization. If we could find out all issues then we could establish all the necessary processes and plans to deal with them. But, it is not so simple, is it? If, in a perfect world, we could know all potential threats then there would be no crises, which means in this case that a crisis is predictable…!

For the sake of discussion, let’s say that our scanning has covered all the potential threats and we now work on a painstaking crisis management plan. I strongly believe that our plan would be complete and very detailed. If that’s the case, we have done what’s necessary in order to deal with any issue. But this is not really what happens in the real world.

Organizations with extensive experience in crisis management, detailed environment scanning that covers all aspects of operations and  very experienced staff have been caught off guard by situations that went out of hand. The BP’s 2009 Sustainability Report says: “Our goal of ‘no accidents, no harm to people and no damage to the environment’ is fundamental to BP’s activities. We work to achieve this through consistent management processes, ongoing training programmes, rigorous risk management and a culture of continuous improvement.” Does anyone believe that BP had no plan to deal with a disaster at an offshore drilling unit like the Deepwater Horizon in 2010?

There are two elements that make a crisis unpredictable. The first one is the element of surprise and the second one is the indeterminable factor. We all have read numerous reports about crises that came as a surprise to top executives, communication professionals, investors, and academics alike although they were expected and they could be avoided. Several organizations are caught by surprise because either they do not really believe that a crisis might really occur or they suffer from a cry-wolf syndrome and they make a wrong assessment at the crucial moment.

The indeterminable factor could be anything… Any unexpected change at the political, environmental, economic, social level or just a human mistake could undermine any crisis management plan.

A crisis is not always inevitable or predictable. A crisis is a situation that has to find us prepared and ready to deal with  issues that go beyond any plan or even our imagination.

The opinions expressed in this article are those of the author, and they do not reflect in any way those of his various affiliations.

Socially-connected Oil & Gas corporations and challenges ahead

20 Sunday Sep 2015

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In my opinion, Warren Buffet has said everything about communications in 23 words: «It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently. »

This is so true that I could hardly find just one argument against it. Some years ago, before the social media era, there could be ways to turn the tables and protect the reputation of an organization focusing on traditional media and specific stakeholders. Those days are irretrievably behind us. Nowadays the social media is a big ocean and every once in a while a couple of tsunamis hit the « coast» of organizations. On the subject of organizations’ exposure to social media with unpleasant experience for them, the first example that came to my mind the BP’s oil spill.

Given the numerous mentions of scholars and communications experts on BP’s PR disaster, it would not be wise to elaborate further on this but we could go bit further and explore some aspects of the Integrated Oil & Gas industry’s exposure to social media. The idea was to explore the social media presence of the top 30 Integrated Oil & Gas corporations globally. The selection of these corporations was based on the 2014 Top 250 Global Energy Company Rankings by Platts, which is considered as one of the most significant Price Reporting Agencies for oil market in the world.

The methodology I followed was the simplest it could be. I just visited the websites of these corporations. The findings of the research show that 84% of the Oil & Gas corporations have presence in at least one social network. Only 5 out of the 30 companies (16%) have no social media presence at all. It’s worth mentioning that the corporations from China (2) and Russia (4), with the exception of Gazprom which has an international expansion, have limited or none exposure to social networks.

On the other hand there are 4 corporations with more than 5 accounts in social networks. The social media champion of the industry is the Royal Dutch Shell with 7 accounts (Facebook, Twitter, Youtube, LinkedIn, Google+, Instagram and Flickr). BP, more experienced than ever in handling difficult situations in social media, has presence in 6 social networks (Facebook, Twitter, Youtube, LinkedIn, Google+ and Flickr). Every corporation has 3 accounts on average in social media.

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The most popular social networks among the Oil & gas corporations are, as expected, Facebook (63%), Twitter (70%), LinkedIn (66%), Youtube (63%) and the others follow far behind.

Three out of the 30 corporations have some limited presence on social media without reference on their main website.

The Integrated Oil & Gas industry has suffered major disasters in the past with several casualties and heavy environmental effects such as the Piper Alpha disaster in the North Sea, which killed 167 people in July 1988, the Alexander L. Kielland disaster in the Norwegian continental Shelf, operated by Phillips Petroleum, killing 123 people, the Seacrest Drillship disaster in the South China Sea killing 91 crew men.

The Oil & Gas corporations which are socially connected probably will know what to do if a crisis occurs. After all these years of accumulated experience we expect from these corporations to handle a crisis in social networks in a textbook manner. It remains to be seen to what extent their crisis management plan in communications and social networks is feasible or not.

More charts about the presence of Oil & Gas industry in social networks are available here.

The opinions expressed in this article are those of the author, and they do not reflect in any way those of his various affiliations.

Back to basics in crisis management

14 Monday Sep 2015

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One of the comments, that my last post regarding the crisis management during the Hurricane Katrina and the forest fires in Greece generated, was the following: «quite interesting post but nothing new or deep». I couldn’t agree more! The conclusions and the lessons learned that were mentioned are not groundbreaking at all. That was intentional. I strongly believe that when we examine cases of crisis management we must always go back to basics.

How many times haven’t we seen violation of basic rules of crisis communications by respectable companies with global footprint and long tradition in their sector?

Half way to success in crisis management is preparedness. Every time we see an organization to be taken by surprise we realize that preparedness is not self-evident. Preparedness requires commitment, planning, leadership, a qualified communications team and so on.  Crisis management always starts before a crisis occurs and this is the basis in order to have successful results.

One common mistake is the delayed response to a crisis. If we don’t express our position on time, someone else will tell our story for us. We all know the importance of a quick response to media queries but sometimes we forget that the citizen journalism and social networks move faster than traditional media.

An organization builds its credibility on transparency. Denying responsibility when an organization has evidently made a mistake will undermine the credibility and eventually damage the reputation. When the public finds out about the trickeries, the consequences in the era of social media might be irreversible.

Finally, when we deal with crisis management, the biggest risk is «commoditization». If we sit back and rest on our laurels we will definitely fail. Crisis management is like the myth of Sisyphus, we should continue rolling the stone from the bottom of the mountain to the top, despite all events to the contrary.

The opinions expressed in this article are those of the author, and they do not reflect in any way those of his various affiliations.

Crisis communications under “rain and fire” – Part II (or Why crisis communications in natural disasters should interest us…)

13 Sunday Sep 2015

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Following the post «Crisis communications under “rain and fire” (Part I) » I was asked by several people why a communications or PR professional should be interested in crisis management of natural disasters such as the Hurricane Katrina and the fires in Greece in 2006. My response was that the main characteristics of the two cases apply to crises that might affect a company.  Let’s see these characteristics:

  • There were casualties
  • There was a strong reaction of public opinion
  • There was lack of preparedness
  • There was a lack of coordination at both operational and communication level

I remind you that the Bhopal disaster, the gas leak incident in India, considered the world’s worst industrial disaster, had a death toll of thousands of people and it was not the result of a natural phenomenon.

After this small introduction let’s see some lessons learned from the «Crisis» and «Post-Crisis» phases of the crisis management in Hurricane Katrina and the fires in Greece.

«Crisis» phase

The crisis management in both cases showed the internal malfunction of administration in both countries. Internal conflicts and personal agendas prevailed at the expense of public interest. If the crisis management team is unable to have smooth internal communication, it is almost impossible to lead to coordinated actions, both at operational and communications level. The failure to achieve internal cooperation reflects negatively on the external environment.

Conclusion: The crisis management team must be functional with good cooperation and communication among the members of the team.

During the research of the two cases I realized the importance of the leadership, the credibility of political discourse and the openness towards the public. The leadership of the American president during the crisis had the following phases: absence, optimism, lack of coordination and finally shift of responsibility. The reassurance by President Bush during the first hours of Hurricane Katrina proved a huge communication mistake that followed the American government for some time. On the other hand, the presence of the Greek Prime Minister with evident sorrow in the area of the fires expressed the public sentiment reducing extreme reactions. However, the allegations of Greek Ministers that the fires were part of an organized plan to destabilize the country was a PR stunt which crashed along the way setting credibility issues got the Greek government. As we saw in a relevant quantitative research, part of the Greek public opinion believed these allegations even thought they were never justified. Passing responsibility (blame game) is a common practice but it can be extremely negative for the credibility of the crisis management team.

Conclusion: Credibility with respect to communications and the main messages of the crisis management team is crucial.

“Post- crisis” phase

In the post-crisis phase, the efforts to defuse tension are followed by a learning process. The evaluation of all the actions during the crisis is crucial in order to become better. The improvement of the crisis management process requires the evaluation of correct and incorrect actions of the organization. The lessons of this kind are part of the organizational function of the organization and they are a compass for the future. In the weeks and months following Hurricane Katrina, a series of institutions investigated the reasons of the failure of the US administration to handle the crisis issuing reports that became publicly available. In Greece, there have been no official inquiries to identify errors during the crisis.

Conclusion:  Every crisis should always be a lesson learned.

This post is only a very small part of my thesis “Crisis communication by Public Administration and government organizations” which goes back in time.

The opinions expressed in this article are those of the author, and they do not reflect in any way those of his various affiliations.

The film «All the President’s Men» as a crisis communications lesson

09 Wednesday Sep 2015

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Yesterday I was asked by a student in LinkedIn to suggest readings about crisis communications. Well, I could suggest several titles to start with but would that be all? I tried to think of other ways to show him how crisis management works. If the Chinese proverb “A picture is worth a thousand words” is correct, how about a two-hour film? The first film that came to my mind was the «Thank you for smoking» but that was too obvious and maybe a bit superficial. And then I thought of the film “All the President’s Men”, the 1976 American political thriller film directed by Alan J. Pakula which is based on the 1974 non-fiction book of the same name by Carl Bernstein and Bob Woodward, the two journalists investigating the Watergate scandal for The Washington Post.

This film is about one of the biggest scandals in American history showing how a big mistake could lead to a gigantic disaster. Although it is one of my favourite history subjects, I don’t want to elaborate further on the governance of Nixon administration during these years as there are more qualified people to offer their knowledge. However I would like to pinpoint some quotes of the film that could be a first-class crisis communications lesson.

Don’t irritate Media especially when you have skeletons in your cupboard

Quote from the film with reference to a statement of Nixon’s director of 1972 presidential campaign:

  • John Mitchell: [on phone] You tell your publisher, tell Katie Graham she’s gonna get her tit caught in a big wringer if that’s published.
  • Ben Bradlee: [later] He really said that about Mrs. Graham?
  • Carl Bernstein: [nods]
  • Ben Bradlee: Well, I’d cut the words “her tit” and print it.
  • Carl Bernstein: Why?
  • Ben Bradlee: This is a family newspaper.

Keep calm and respond to media inquiries with tranquility

Quote from the film with the dialogue between Washington Post’s report Bob Woodward and the former CIA officer and one of the Nixon White House “plumbers”, Howard Hunt:

  • Woodward: [on the phone] Hello, I’m Bob Woodward of the Washington   Post
  • Howard Hunt: Howard Hunt here.
  • Woodward: Hi, I’m Bob Woodward of the Post and–
  • Howard Hunt: Yes, yes, what is it?
  • Woodward: I was just kind of wondering why your name and phone number were in the address books of two of the men arrested at Watergate?
  • Woodward: (blind panic) Good God!  [And he bangs the phone down sharply]

Inexperienced and untrained people in an organization might ruin any crisis management plan

Quote from the film with the dialogue between Washington Post’s report Carl Bernstein and a librarian from the Library of Congress:

  • Librarian: Library.
  • Bernstein: Hi. Carl Bernstein of the Washington Post. I was just wondering if you remember the names of any of the books that Howard Hunt checked out on Senator Kennedy.
  • Librarian: I think I do remember, he took out a whole bunch of material. Let me just go see. [sound of the phone being laid down]
  • …..
  • Librarian: Mr. Bernstein?
  • Bernstein: Yes, ma’am.
  • Librarian: What I said before? I was wrong. The truth is, I don’t have a card that Hunt took out any Kennedy material.  I remember getting that material out for somebody, but it wasn’t Mr. Hunt. The truth is, I’ve never had any requests at all from Mr. Hunt. The truth is, I don’t know Mr. Hunt.

Don’t get caught unprepared (literally sleeping)

Quote from the film with the dialogue between Washington Post’s report Carl Bernstein and Nixon’s director of 1972 presidential campaign, John Mitchell:

  • John Mitchell: Yes?
  • Bernstein: Sir, this is Carl Bernstein of the Washington Post, and I’m sorry to bother you but we’re running a story in tomorrow’s paper that we thought you should have a chance to comment on.
  • John Mitchell: What does it say?
  • Bernstein: [starting to read]  John N. Mitchell, while serving as US Attorney General, personally controlled a secret cash fund that–
  • John Mitchell: Jeeeeeeesus
  • Bernstein: –fund that was used to gather information against the Democrats–
  • John Mitchell: Jeeeeeeesus
  • Bernstein:  –according to sources involved in the Watergate investigation. Beginning in the spring of 1971–
  • John Mitchell: Jeeeeeeesus
  • Bernstein: –almost a year before he left the  Justice Department–
  • John Mitchell: Jeeeeeeesus
  • Bernstein:  –to become President Nixon’s campaign manager on March 1, Mitchell personally approved withdrawals from the fund–
  • John Mitchell: –all that crap, you’re putting it in the paper? It’s all been denied. You tell your publisher–tell Katie  Graham she’s gonna get her tit caught in a big fat wringer if that’s published. Good Christ! That’s the most sickening thing I ever heard.
  • Bernstein: Sir, I’d like to ask you a few—
  • John Mitchell: –what time is it?
  • Bernstein: 11:30.
  • John Mitchell: Morning or night?
  • Bernstein:
  • John Mitchell: Oh. [And he hangs up]

 Any other suggestion about a film that we could use as a crisis communications lesson is more than welcome.

Crisis communications under “rain and fire” (Part I)

08 Tuesday Sep 2015

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Crisis communications in natural disasters has a vital importance for social, political and economic reasons. Both theory and experience have shown that some crises are in fact communications crises (Garnett & Kouzmin, 2007). The Hurricane Katrina in New Orleans and fires in Peloponnese in Greece in 2007 are two examples of crisis communications failure. Bureaucratic deficiencies, lack of preparation and inexperienced staff have led to communications disaster.

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The selection of this cases was made for the following reasons:

  • There were casualties
  • There was a strong reaction of public opinion
  • There was lack of preparation by the government
  • There was a lack of coordination at both operational and communication level

Pre-crisis phase

The hurricanes in the US and the fires in Greece are natural phenomena with frequent occurrence and they cannot be considered surprising when incurring. What characterizes the two cases is the paradox that while there was awareness of the risk, both government mechanisms in the US and Greece seemed unprepared to meet the expectations and the requirements. The early symptoms of the upcoming catastrophe were disregarded.

Conclusion: The lack of preparedness and readiness are shaky foundations for crisis management.

The difference between the two cases is that the risk in Greece was permanent but not geographically specific whereas in the US there were official warnings days before the disaster for specific geographical areas in clearly defined time perspectives. What emerges through the elements of the research is that there was a strategic plan in the US to deal with natural disasters as opposed to Greece where the risk of fires seemed to be treated at the tactical level. As a result, we can distinguish a timeless deficit of preparedness by the Greek authorities to manage natural disaster crises. In New Orleans, the story could have been very different if the federal and local authorities had implemented the crisis management plans considering that both the state and federal authorities had already been on constant alert because of 9/11.

Conclusion: Preparedness and readiness are necessary in strategic and tactical level.

The appointment of unqualified people to manage crises leads to failure as it was apparent in the US during the Katrina hurricane. The failure of the inexperienced director of FEMA to meet the demands of the occasion preparing the state apparatus before the crisis demonstrates the importance of the proper selection of the right professionals.

Conclusion: Preparedness and readiness for crisis management require professional and experienced staff.

Conclusions about the Crisis and Post-Crisis phases of those two crises will follow in the coming days.

Crisis communications papers: Agro-Communication and the National Education Association’s Crisis Communications Guide & Toolkit

05 Saturday Sep 2015

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Two new papers related to crisis communications are presented today by the ‘Crisis Analytics’ blog.

The first one is about crisis communications in Agribusiness and it was presented during the Third International Scientific Conference EMPLOYMENT, EDUCATION AND ENTREPRENEURSHIP.

The title is CRISIS COMMUNICATION IN AGRIBUSINESS, MEDIA AND CONSUMERS and the authors are Dragana Jovanovc and Vesna Baltezarevic.

ABSTRACT:  Food safety became media question par excellence considering seriousness of this question and how many people are interested in it. Unfortunately, in lack of trustworthy information, consumers relay on media stories which, by its nature, going out of information frame towards sensationalism and disinformation. This paper consider different paths in agro-communication and possibilities to overcome information gap between food producers, media and consumers, considering information laxity within first ones, communication methods of media and growing fear for health by third part. In a word, we analyze communication weakness of agro-companies in crisis, unseriousness of mass media in these vital questions (including incompetent sources and politicization of health issues)and consumer who (overwhelmed with different information) can`t select trustworthy sources. We will, also, briefly consider methodology of creating panic among public, but also a methodology that can help agro-companies to influence on their own public image (and d food producing too).

The second one is a university thesis by Ashley Crockett-Lohr and the title is SOCIAL MEDIA AND CRISIS COMMUNICATION: AN UPDATE TO THE 2000 NATIONAL EDUCATION ASSOCIATION’S CRISIS COMMUNICATIONS GUIDE & TOOLKIT.

The thesis is available here: CrockettLohrA_2015-3_BODY

McDonald’s cuts ties with chicken supplier accused of cruelty

01 Tuesday Sep 2015

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Source: USA Today

McDonald’s has cut ties with one of its chicken suppliers after an animal rights group obtained gruesome video footage that appears to show operators of the Tennessee poultry farm clubbing small and sickly birds to death.

The video taken at T&S Farm in Dukedom, Tenn., which the activist group Mercy for Animals says was secretly recorded by one of the group’s investigators, appears to show a man and woman at the farm pummeling the birds using a pole with a large spike attached to the end of it.

The graphic video, which was viewed by USA TODAY, also shows the workers standing on the birds heads and pulling their bodies to break their necks.

The farm is a contractor for the mega poultry producer Tyson Foods which supplies chicken for McDonald’s, which is the second biggest purchaser of poultry in the USA.

Tyson’s spokesman Worth Sparkman said the company was investigating the video, but “based on what we currently know, we are terminating the farmer’s contract to grow chickens for us.”

“We’re committed to animal well-being but don’t believe this video accurately depicts the treatment of chickens by the thousands of farmers who supply us,” Sparkman said in a statement.

McDonald’s said in a statement that the activity depicted in the video was “unacceptable” and expressed support for Tyson’s decision to end the relationship with the supplier.

“We’re working with Tyson Foods to further investigate this situation and reinforce our expectations around animal health and welfare at the farm level,” the McDonald’s statement said. “We’re committed to working with animal welfare and industry experts to inform our policies that promote better management, strong employee education and verification of practices.”

Vandhana Bala, an attorney for Mercy for Animals, said the video was recorded recently by one of the group’s investigators who applied for a job at T&S and worked at the farm for about four weeks. During that time, she says the investigator witnessed more than 100 instances of abuse of the animals.

Mercy for Animals also says their investigator found that the birds were bred to grow so quickly that they became crippled by their own weight and often died from organ failure. The group also claims that the birds are crammed into sheds where they live in their own waste before being trucked on to the slaughterhouse.

All birds grown at the farm, which has a capacity of more than 120,000 birds, were transported to Tyson’s processing facility in Union City, Tenn., a plant dedicated to making Chicken McNuggets and other chicken products for McDonald’s, according to the group.

“It is important for McDonald’s to take the ethical stance that these sorts of really horrible institutionalized forms of animal abuse be eliminated from its supply chain,” Bala told USA TODAY.

Susan Blassingame, one of the owners of T&S Farm, declined to comment.

The video’s publication comes as America’s top burger chain has been mired in a sales slump and has attempted to bolster the image of its food.

Late last year, McDonald’s posted on YouTube a behind-the-scenes video of one of five U.S. facilities where Chicken McNuggets are produced. The chain decided to lift the veil on how its chicken is made after repeatedly being asked by customers what their nuggets are made of. The chain has also gone to great effort to shake the perception of selling only junk food by offering mandarins in Happy Meals and introducing egg whites to its breakfast menu.

Mercy for Animals has taken aim at suppliers of McDonald’s and other fast food chains in the past.

In 2011, McDonald’s and Target called on its U.S. egg supply chain manager, Cargill Inc., to end its relationship with Sparboe Farms in Litchfield, Minn. after Mercy for Animals published undercover video of farm workers swinging a chicken by a rope or chain and another of a worker shoving a hen in a co-worker’s pants pocket.

A 2012 video showing Idaho dairy workers abusing cows at a farm supplying Burger King led to criminal convictions.

After the Idaho video, lawmakers in that state passed legislation banning undercover videos at factory farms. A federal judge in Idaho, however, ruled earlier this month the state’s ban was unconstitutional because it violated the 1st Amendment. Missouri, Iowa, Kansas, Montana, North Dakota, Utah and North Carolina have passed similar laws that are currently on the books.

In the new video, Bala said the group decided to obscure the faces of the individuals that appear to be clubbing the birds out of abundance of concern that they not violate state privacy laws. She said the group also on Tuesday turned over the video footage to local law enforcement officials in hopes they’ll prosecute the farmers.

Mercy for Animals officials called on McDonald’s, which has enormous purchasing power, to push its suppliers to make a number of changes to its farming practices, including ending selective breeding practices and providing birds with more space.

“It’s not good enough for McDonald’s to simply end its contract with this one farm,” said group spokesman Matt Rice. “What we’re asking McDonald’s to do is end animal abuse throughout its entire supply chain by adopting meaningful animal welfare requirements for all of its suppliers.”

Three Lessons Learned from Subway’s Crisis

26 Wednesday Aug 2015

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by Hilary Fussell Sisco

Source: Institute for Public Relations 

When a crisis occurs, an organization needs to go above and beyond the publics’ expectations to manage the situation. The recent affair with Subway tests the foundational elements of crisis management.

In early July, it was reported that federal agents raided Subway’s longtime pitchman Jared Fogle’s home where they seized electronics and computers. These early reports stated Fogle was sitting with investigators at the home and was not under arrest or being charged. Subway then said they believed the search was “related to a prior investigation” of someone who used to work for Fogle’s foundation who had been charged in May for production of child pornography and possession of child pornography. After the raid, Subway quickly responded that they had “mutually agreed with Jared to suspend their relationship” pending the investigation.

Then, Subway stayed silent for a month. They did not make any statements about Fogle or the ongoing investigation until August 1, when they tweeted “The latest allegation about Jared Fogle if true, is appalling. As previously stated, we have suspended our relationship with Jared.”

Last week, as media reports increased with documentation of Fogle’s possession of child pornography, as well as instances of sex with minors, Subway officially ended its relationship with Jared. Their first tweet was concise, “We no longer have a relationship with Jared and have no further comment.” The following tweet attempted to reposition the brand, “Jared Fogle’s actions are inexcusable and do not represent our brand’s values. We had already ended our relationship with Jared.”

In this crisis, Subway should have taken several early steps to mitigate the situation. Subway had almost six weeks between the original raid and the increased media reports to enact a crisis management plan. Despite this ample amount of time, Subway could have taken advantage of three foundational elements of crisis communication:

Communication: The organization did not engage in dialogue with its public. This was a time when they could be addressing the issue either to reiterate the steps they were taking or to shift the topic of conversation away from the investigation. The organization began to receive immediate backlash for its use of “no comment” and the terse tweets that left many people perplexed.

Branding: Subway did not begin to remove Jared’s name, image, and other attributions from their stores and digital media until the charges were filed. This was an opportunity to launch a new idea or campaign that could reinforce Subway’s organizational values, but instead they waited to react to the investigation rather than take action.

Taking Responsibility: Fogle became a household name because of Subway. His notoriety, income and career have come from the company. Subway should take responsibility for their association with him and try to reposition themselves through honesty and accountability. In a crisis, often organizations will set up charity funds or other corporate social responsibility activities to offset the reputational damage; Subway has not taken these next steps.

Subway’s lack of immediate action has placed them behind the curve. For organizations to be successful in crisis management they need to remember the basics, be open with your publics, remember your organization’s values and make amends if possible. Subway will need to do much more to move forward now that they are playing catch up behind this crisis.

Hilary Fussell Sisco, Ph.D., is an associate professor of strategic communication at Quinnipiac University. Follow her on Twitter @hfsisco.